Irving Industries Ltd. et al. v. Canadian Long Island Petroleums Ltd. and Sadim Oil & Gas Co., (1974) 3 N.R. 430 (SCC)

• Judge: Martland, Spence, Pigeon, Dickson, and de Grandpré, JJ.
• Court: Supreme Court (Canada)
• Case Date: October 11, 1974
• Jurisdiction: Canada (Federal)
• Citations: (1974), 3 N.R. 430 (SCC);[1974] SCJ No 122 (QL);3 NR 430;1974 CanLII 190 (SCC);[1974] 6 WWR 385;50 DLR (3d) 265;[1975] 2 SCR 715

Irving Ind. v. Cdn. Long Island Petro. (1974), 3 N.R. 430 (SCC)

MLB headnote and full text

Irving Industries (Irving Wire Products Division) Ltd. et al. v. Canadian Long Island Petroleums Ltd. and Sadim Oil & Gas Co. Ltd.

Indexed As: Irving Industries Ltd. et al. v. Canadian Long Island Petroleums Ltd. and Sadim Oil & Gas Co.

Supreme Court of Canada

Martland, Spence, Pigeon, Dickson,

and de Grandpré, JJ.

October 11, 1974.

Summary:

This case arose out of an action for specific performance by one of two joint owners of an oil lease. The plaintiff claimed that it was entitled to purchase the interest of the other joint owner in the oil lease which was sold to a third party. The joint owners agreed not to sell their interests in the oil lease without giving the other joint owner the opportunity of meeting the proposed terms of sale. The defendant joint owner sold its joint interest in the oil lease to a third party in breach of its agreement with the plaintiff. The defendant joint owner alleged that the agreement was invalid because it was contrary to the rule against perpetuities. The trial court allowed the plaintiff's action and granted an order for specific performance against the third party which purchased the interest in the oil lease - see 31 D.L.R.(3d) 344.

On appeal to the Alberta Court of Appeal the appeal was dismissed and the judgment of the trial court was affirmed - see 37 D.L.R.(3d) 1.

On appeal to the Supreme Court of Canada the appeal was dismissed and the judgment of the Alberta Court of Appeal was affirmed. The Supreme Court of Canada held that the contingent option to purchase agreed to by the parties did not create an interest in property but was a personal contract to which the rule against perpetuities did not apply. The Supreme Court of Canada stated that a stranger to a contract was a proper party to an action for specific performance where the stranger acquired possession of the subject matter of the contract with notice of the contract - see paragraphs 37 to 41.

Perpetuities - Topic 1800

Rule against perpetuities - Interest to which the rule does not apply - Personal contracts - Contingent option to purchase (right of first refusal) an oil lease - Two joint owners of an oil lease agreed not to sell their interests without giving the other joint owner the opportunity of meeting the proposed terms of sale - The Supreme Court of Canada held that such a contingent option to purchase did not grant an absolute right to purchase property and accordingly the rule against perpetuities did not apply to such an agreement.

Specific Performance - Topic 3048

Practice - Parties - Strangers to a contract - Purchaser of the subject matter of a contract - The Supreme Court of Canada stated that a stranger to a contract is a proper party in an action for specific performance where the stranger acquired possession of the subject matter of the contract with notice of the contract - See paragraphs 37 to 41.

Cases Noticed:

London and South Western Railway Company v. Gomm (1882), 20 Ch. D. 562, dist. [para. 12].

Frobisher Limited v. Canadian Pipelines & Petroleums Limited et al., [1960] S.C.R. 126, dist. [para. 12].

Tulk v. Moxhay (1848), 2 Ph. 774; 47 E.R. 1345, refd to. [para. 15].

Weber v. Texas Company (1936), 83 F.(2d) 807, folld. [para. 25].

Manchester Ship Canal Company v. Manchester Racecourse Company, [1901] 2 Ch. 37, folld. [para. 26].

Lumney v. Wagner (1852), 1 De G.M. & G. 604, refd to. [para. 30].

Murray v. Two Strokes Ltd., [1973] 3 All E.R. 357, folld. [para. 32].

Albay Realty Ltd. v. Dufferin-Lawrence Development Ltd. (1956), 2 D.L.R.(2d) 604, dist. [para. 33].

Counsel:

G. Dixon, for Canadian Long Island Petroleums Ltd.;

J.M. Hope, Q.C., for Sadim Oil & Gas Co. Ltd.;

J. Hopwood, for the respondents.

This appeal was heard by the Supreme Court of Canada on June 4 and 5, 1974. Judgment was delivered by the Supreme Court of Canada on October 11, 1974.

The judgment of the Supreme Court of Canada was delivered by MARTLAND, J.